Honeywell to Acquire Johnson Matthey's Catalyst Unit for £1.8B

Honeywell International Inc. agrees to acquire Johnson Matthey’s Catalyst Technologies unit for £1.8 billion in cash, expected to enhance long-term growth and earnings. This strategic move aims to bolster Honeywell’s offerings in sustainable energy solutions.

Date: 22-05-2025

AI Rating: 7

**Strategic Acquisition Moves the Market**: Honeywell International Inc. (HON) has announced its intention to acquire Johnson Matthey Plc’s (JMPLY, JMAT.L) Catalyst Technologies unit for £1.8 billion. This acquisition, anticipated to close in the first half of 2026, has drawn attention from investors due to its implications for growth and earnings.

One of the key highlights of this transaction includes its valuation metrics—it equates to approximately 11 times the estimated 2025 EBITDA. The deal is purported to yield tax benefits and cost synergies, making it an attractive proposition from a financial standpoint.

This acquisition is likely to deliver enhanced growth opportunities for Honeywell, particularly in the field of sustainable energy solutions. By incorporating Catalyst Technologies, Honeywell aims to solidify its position in lower-emission fuel markets, including sustainable methanol, sustainable aviation fuel (SAF), blue hydrogen, and blue ammonia. Such a strategic alignment supports the global push for energy security and emission reduction.

**Impact on Earnings**: According to the report, the acquisition is expected to be accretive to Honeywell’s earnings in the first year post-transaction. This prospect of immediate earnings enhancement is appealing to investors looking for short-term gains. However, since the full financial benefits may take time to materialize, this expectation should be monitored closely.

For Johnson Matthey, the transaction is anticipated to generate net sale proceeds of approximately £1.6 billion, with plans to return £1.4 billion to shareholders, which constitutes roughly 88% of the expected net proceeds. This generous return indicates a strong commitment to shareholder value, potentially enhancing confidence among existing and prospective investors in Johnson Matthey.

**Conclusion**: Overall, this acquisition would be considered fundamentally positive for Honeywell, signaling a proactive approach to expanding its asset base and capabilities in an evolving market. Johnson Matthey’s return of capital to shareholders can also be viewed as a stabilizing factor for investor sentiment.

Stocks: HON JMPLY JMAT.L